Erp Project Are Expensive and Risky

ERP projects are expensive and risky. Why did Keda decide to embark on an ERP implementation project?

Answer:

It is true that ERP projects are expensive and risky, but thosecan’t be the measurer whether or not one should be takeninto consideration. It all depends on the degree of is it or is itnot worth it to proceed with. Every action has a down side toit, that’s what we have to calculate, considerate, see if theresult expected is much greater than the effortmade/sacrificed (Gained/Profit > Cost/Effort), and then makethe decision.The same goes in this case. Keda decide to embark on anERP implementation projects because they see the need ofERP implementation, the great difference that ERP system isgoing to affect their overall performance; and how muchmore productive, practical, and efficient their company willbe despite of the expensive and risky down side of ERPimplementation.Keda had silo-based business model and flexible cultureenabling decentralized decision making, high degree ofautonomy and a free-wheeling entrepreneurial culture.However, it had its negatives as well. It also faces businessand operational challenges; which is summarized intointernal and critical issues. Keda’s internal issues are lack ofintegration. Due to heavily compartment status insideorganization and to extremely decentralized decision-making,it brought to duplicate activities and costs. Also, informationflows between departments simply did not work. The criticalissues are under-usage of implants and waste of rawmaterials and reusable parts, and Inventory management.The highly customized Keda’s production process often needsto use unique parts. Without an ERP that could keep track ofthese materials, Keda was unable to calculate costs andprofits of its production process. This shows the need for ERPfor Keda

ERP projects can be justified in terms of cost effectiveness and business benefits. The business justification for the project in Keda’s case are the following.1.) reduction in costs by removing redundancy in processing tasks and integrating disconnected business units and thereby enabling faster information flows.2.) Improved decision making in terms of accurate and timely product cost and profitability assessment.3.) Improved material management processes.4.) Improved assessment of processes in terms of contribution to the business.5.) optimized utilization of resources to meet demand and reduction of waste in processes like production delays.6.) gain competitive advantage in terms of managing diversification efforts by supporting multi-plant operations.7.) urgent replacement for the de commissioned mrp-II system

What are the major processes of implementing an off-the-shelf ERP system?

Answer:

1.) Classify the core needs of system

2.) Choosing an ERP vendor

3.) Process redesign

4.) Systemimplementation

5.) System testing

6.) User training

7.) System rollout

Leadership plays a pivotal role in the success of ERP projects. Which “leadership best practices” did the Keda managers engage in?

Answer:

Zhu, the vice general manager ensured all of the senior managers,including the director, were involved in this presentation, negotiationand selection process. During assembling the project team, they insistedthe “top dogs” of the various departments be involved. The topmanagement support was also reflected into the tolerance for theproduction delay after ERP rollout

What were the main challenges faced by Keda in each stage of its ERP project? What factors contributed to the project’s success in the face of these challenges?

Answer:

Out of number of hurdles KEDA faced in the ERPimplementation project, below are some notable issues,which they face ?Selection Of ERP:Keda found that as their business grow there were vast number of information that need to be organized, which aids in proper decision making and timely flow of information with in various departments. They also figured out that to bringtransparence and freewheeling corporate culture theyneed to encourage decentralization, which can be donewith integration of various departments. This can onlybe accomplished by transforming the entire company’soperation digital i.e. by using a ERP. Moreover theywere in an desperation to find an ERP since their MRP-IIsystem’s vendor, Beijing Riamb Software IT Co. Ltd.,had ceased maintenance support for the system due toan internal corporate restructuring?Make Or Buy:Having chosen to run the organizationunder ERP, the big question that was put before themwas to make an ERP with the companies’ own ITdepartment or to buy the ERP from existing vast list of